INFLATION ROSE TO 6.2% IN OCTOBER, THE HIGHEST ANNUAL RATE IN 30 YEARS.
As Brad Polumbo notes in the Washington Examiner, “Citizens upset over inflation should not look at Congress but at the Federal Reserve, the central bank that controls U.S. currency:”
“While the rate of inflation might differ from year to year due to aggregate supply or demand shocks, the long-run trend rate of inflation is ultimately determined by monetary policy,” economist William J. Luther told me in a recent interview . “The [Federal Reserve] can control inflation.”
To “stimulate” the economy amid the COVID-19 crisis, the Fed engaged in a massive expansion of money supply — basically, it (digitally) printed a bunch of new money. As my Foundation for Economic Education colleague Peter Jacobsen, an economist, has explained , “If more dollars chase the exact same goods, prices will rise.”
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Ultimately, rising prices of this magnitude represent a grave problem for millions of families. The temptation will be to blame President Joe Biden, who certainly has played at least some small part in this concerning trend. Yet, we won’t solve this problem until we concentrate our criticism on the real culprit behind our inflation malaise: the Fed and its reckless monetary policy.
In any case, MSNBC assures me this is quite a good thing.
But wait — the worst is yet to come: If You Think Inflation Is Bad Now Just Wait Until The Winter.